The meeting commenced at 1:03 p.m. In attendance were Commissioners Taylor, Suggs, Gant, and Wood; staff members King, Shreve, Frederick, Cullins, Sullivan and Bryan. Also in attendance were Ms. Jacki Meiser, General Counsel and Mr. Tim Murphy of Murphy & Murphy, CPA, LLC.

The meeting re-adjourned into Regular Session at 1:40 p.m.

A. FY05 Audit

Mr. Tim Murphy, of Murphy & Murphy, was introduced to the Board and invited to present the FY05 Audit which his company conducted. He was pleased to note that MetCom received an “Unqualified Opinion”, the highest level of approval, and briefly reviewed highlights of the Report as follows:

<STYLE="MARGIN-TOP: type="disc" 0in? margin-bottom: 0in; Page 3, Management’s Discussion & Analysis Pages 9& 10, Statements of Net Assets (Statistical Information) Page 11, Statements of Revenues, Expenses and Changes in Fund Net Assets Page 17, Notes to Financial Statements (Compliance) Page 21, (Amortization of Principal/Interest Payments of all Bonds Page 29, Item #6, Retirement & Pension Plan Page 36, Schedule of Service Charges/Direct Operating Expenses Page 38, Schedules of Administrative/Engineering Expenses.

Mr. King added that he will request Ms. Shick to investigate the feasibility of transferring a portion of the FY05 net income back into Reserves when she commences work.

At the conclusion of Mr. Murphy’s review, Commissioner Wood questioned whether the one time payment to the State Retirement Plan fully funded MetCom’s retirement liabilities with respect to its employees. Mr. King agreed, but noted that, on an annual basis, the Commission makes a payment based on a percentage of the payroll, together with a 2% contribution by employees. However, this number can change, depending on the actuarian’s projections during a specific year.

For further clarification, Mr. Murphy assured the Board that he considers the State Retirement Plan to be one of the safest plans existing in Maryland, and that the Commission has indeed fully funded its retirement liabilities within that plan.

A copy of the complete Audit is attached to the Minutes.

B. Refinancing of Bond Issues

Mr. King reported that the Board of County Commissioners approved their Resolution regarding MetCom’s 1991 Bond refinancing, which is scheduled to go to settlement on December 15th. County Commissioner Dan Raley has suggested utilizing the projected ±$16,000 savings to reduce current Benefit Assessment Charges to property owners at St. George’s Beach, which was one of the projects funded by that issue in 1991. This action is permissible under current law. However, historically, the Commission has used those savings to offset the cost of pending Capital Improvements. He recommended at this point in time that the Board delay its decision on this issue until the legislature has made a determination on the Commission’s suggested change to the Uniform Benefit Assessment Charge. The Board agreed with Mr. King’s recommendation.

Mr. King reported a further opportunity for a bond refinancing originating from the Department of Housing & Community Development (DHCD) within the Local Government Infrastructure Financing Program. DHCD would like to refinance the Commission’s 1995 and 1996 issues, which they project will result in a projected savings of ±$76,500 over the term of the bond, based on the assumed interest rate of 4.3%. He noted that no further action is required from either the MetCom or County Commissioners Boards. A conference call which will begin the process is scheduled for next Thursday morning, and settlement is scheduled for March, 2006. The Board agreed that the savings would be significant.

C. St. Clement Shores Expansion Study

Mr. King briefly reviewed his report to the Board which he presented at the November 10 meeting, and reported that although he has received the requested quote from Dewberry & Davis in the amount of $71,000 to perform additional hydro-geologic work, he is not ready to recommend its acceptance at this time. Instead, he proposes presenting the current information, cost and potential capacity at a Public Information Meeting. If property owners wish to proceed, a formal Public Hearing will be scheduled.

A. Marlay-Taylor Sludge Project Update

Mr. Shreve reported approval of an invoice in the amount of $610,146 for cleaning of the additional digester.

He also noted a structural design issue relating to a floating cover on one of the digesters which will cost approximately $65,000-$70,000 to repair.

It is anticipated that the project will be completed by the end of February/March, 2006.

Mr. King reported nothing of consequence in either the Accounts Receivable or Securities Reports.

A. Leave & Holiday Policy Changes

Ms. Cullins reviewed her Memorandum dated December 8, 2005. A copy is attached to the Minutes. She requested that the Board review this document prior to the January, 2006 meeting where it will be further discussed.

B. Workmen’s Compensation Contract

Ms. Cullins noted that this contract is valid for three years, with an annual premium negotiation in December. It is currently held by Simms Insurance Group, through the Erie Insurance Group, which has several insurance companies within the group that offer different premium costs based on the insured’s eligibility for specific underwriting requirements. Following its review of the available plans, the Simms Insurance Group is transferring the Commission’s account from the Erie Insurance Exchange to the Erie Insurance Company in order to take advantage of the lower premium and dividend plan.

Based on MetCom’s excellent rating, the increased premium was lowered from the original 20% to 8%. This year’s premium will, therefore, be $31,743, paid in monthly installments.

C. Staff Christmas Charity, 2005

Ms. Cullins concluded that, in partnership with St. Mary’s County Hurricane Relief Fund, staff chose the town of D’Iberville, Mississippi for its Christmas, 2005 charity effort. The amount of ± $1,500 which was raised through various staff functions was used to fill six boxes with gifts for children at a local school.

A. Arsenic Well Bid Opening

Mr. Frederick reported that bid opening for this project has been scheduled for December 21st, at 2:00 p.m.

B. East Rennell PVC Water Main Replacement

This project is on schedule and is projected to be completed before Christmas.

C. Andover Road & Andover Estates Stakeout

Andover Road: Mr. Frederick noted that design drawings for this project are in his possession for final review. He expects that this process will be completed within the week. They will then be forwarded to MDE for approval.

Andover Estates: The contractor has commenced the survey to locate items, and placement of stakes installation of Grinder Pumps has been completed.

D. Requests for Waiver of Mandatory Connections

Mr. Frederick reported that, effective July, 2005, LUGM changed a requirement within the Zoning Ordinance. This now allows a possible waiver to the previously mandatory connection of properties located in a development district; within a town center; and within approximately 1,700’ of a public sewer/water line. He added that the distance requirement was also completely removed. As a result of this change, staff has been receiving numerous requests for consideration of a waiver. Although some requests have merit, there are others that do not, e.g. those located within a development district. He stressed that the development district is specifically set up to be developed, and is the area within which MetCom should focus its infrastructure.

In an attempt to find a viable solution, staff is recommending that the Board consider the re-implementation of a previous MetCom policy which allows the developer to build a water or sewer line, and then to recover some of that cost from property owners not developing within that specific project who subsequently ties into the line. The Commission would keep track of the process, and pass the money back to the developer. Mr. King noted that this policy has not been enforced since the 1980’s, but that because of increased technology, there is now more superior capability to track and set up controls to minimize the Commission’s liability for tracking and collecting these fees. Staff will research this issue further and will offer a recommendation for the Board’s approval at next month’s meeting. If it is accepted, the issue will be taken to Public Hearing.

In answer to a question from Commissioner Wood, Mr. King replied that this policy does not apply to properties within the Rural Preservation Districts.

E. Holland Forrest Well

In conclusion Mr. Frederick noted that, because Holland Forrest has a borderline arsenic level of 9.83, as opposed to the State’s required MCL level of 10, replacement of the well is not required. However, specific monitoring requirements will have to be satisfied. Commissioner Taylor noted that he would be reluctant to remove it from the bid at this point, and Commissioner Wood agreed. A final decision on this issue will be made following opening of the bids on December 21. In the interim, staff will arrange a Public Meeting with property owners.

A. Open End Chemical Purchasing Contract, Ferric Chloride

Mr. Sullivan requested approval to award the above referenced contract to Kemiron Companies, Inc. for its low responsible bid submittal of $398.50 per dry ton; a 33.72% increase over the current rate.

B. Customer Satisfaction Survey

Mr. Sullivan reported that staff is researching methods to improve the 20% average return. However, 98% of the feedback was positive. Staff eventually determined that the sole negative response related to the pressure at the customer’s house, which was not the Commission’s responsibility, and which was finally resolved to the customer’s satisfaction.

There being no further business, Commissioner Suggs moved to adjourn at 3:03 p.m. Commissioner Gant seconded the motion and approval was unanimous.

Lilian J. Bryan, Secretary

* Attachments filed at MetCom Administrative Office